LONDON -- Eidos plc ("Eidos") (LSE: EID.L; NASDAQ:
EIDSY), one of the world's leading publishers and developers of
entertainment software, today announces its preliminary results for the
year to 30 June 2004.

"Since announcing our intention to undertake a review of the
strategic alternatives available to the Company on 17 June 2004, we have
made good progress. On 3 August, the Board of Eidos confirmed that it
had received expressions of interest from a number of parties.
Discussions, which relate to a possible sale of the Company, are
progressing well, although there can be no certainty at this stage as to
whether or not they will lead to an offer being made for the Company.
Further information will be provided to the market, as appropriate, in
due course.

While the results for the year to June 2004 are disappointing, the
Company's underlying business and product portfolio remain strong.
Management continues to focus on driving the business forward and a
significant release schedule, comprising a mix of sequel and new
franchise titles, is planned for the year ahead. Five titles are
scheduled for release in the first half, including Championship Manager
5 (with an online version of the game to follow), and nine titles in the
second half, including the next edition in the highly successful Hitman
and Tomb Raider franchises. Our most recent game release, ShellShock Nam '67, launched in Europe on 3 September, charted at No.2 and is
selling in line with management's expectations."

Eidos plc is listed on the London Stock Exchange (ticker: EID.L)
and on the Nasdaq National Market (symbol: EIDSY). Further information
on the Company can be found at www.eidos.com

Eidos and the Eidos logo are trademarks of Eidos plc. All other
names and/or brands and/or product names referred to in this release are
registered trademarks or trademarks pending registration belonging to
Group companies. All rights reserved.

Statements made in this release with respect to the Group's
plans, strategies and beliefs and other statements that are not
historical facts are forward-looking statements (as that term is defined
in the United States Private Securities Legislation Reform Act 1995)
that involve risks and uncertainties because they relate to events and
depend on circumstances that may occur in the future. There are a number
of factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements, including without limitation, general economic conditions in
the Group's markets, particularly levels of consumer spending;
exchange rates, particularly between the pound sterling and the U.S.
dollar, in which the Group makes significant sales; and the Group's
ability to continue to win acceptance of its products, which are offered
in highly competitive markets characterised by continuous new product
introductions, rapid developments in technology, subjective and changing
consumer preferences (particularly in the entertainment business) and
other risks described in periodic reports and filings with the Security
and Exchange Commission. The Company undertakes no obligation to update
any forward looking statements contained in this release, whether as a
result of new information, future events or otherwise.

CHIEF EXECUTIVE'S REVIEW

Overview

While the results reported for the full year are disappointing, the
Company continues to make good progress with its new development
methodology and its increased focus of leveraging owned intellectual
property.

Recognising that a number of game releases did not live up to
management's sales targets (specifically Hitman: Contracts,
Commandos 3, Legacy of Kain: Defiance and Whiplash), the Company's
financial performance this year was materially impacted by two key
events, both of which occurred in the second half.

Firstly, the unexpected softness in the games market, particularly
in the US, which started back in May (as illustrated in the 17%
year-on-year fall in US games software sales for that month(1)).
Consequently, the previously anticipated c 700,000 units of re-orders
for our biggest title release of the year, Hitman: Contracts, did not
materialise. This was despite the game both heading the charts and then
maintaining a strong chart position in both Europe and the US from its
launch in April.

Secondly, in view of the prevailing weakness in the games market,
the Board decided in June to defer the launch of the ready-to-release
ShellShock: Nam '67 game until September 2004 to give this new
franchise a better opportunity to deliver on its true potential. As a
consequence, its operating profit contribution moved out of the
financial year to 30 June 2004 and into the current financial year.

In the light of the above, this year's results should not be
viewed in isolation as they do not adequately reflect the significant
achievements and improvements of the past 36 months in terms of
increased gross margins, balance sheet strength, cash generation and the
on-time release of games. The Company continues to benefit from these
improvements, all of which have contributed to an underlying business
and product portfolio of game titles which remain strong and well
positioned for the future. However, our lack of operational scale and
diversification continue to expose the Company to changing market
conditions, as was experienced this year.

(1)Source: US NPD Data, May 2004

Review of Operations

In the year to 30 June 2004, the Group achieved a turnover of GBP
133.9 million (2003: GBP 151.5 million) and recorded an operating loss before goodwill and exceptional items of GBP 2.0 million (2003: GBP 13.9
million profit). While the total number of units shipped in both 2003
and 2004 were the same at 12.5 million units, gross margins again
improved in the year to 62.8% (2003: 59.0%) in a notably tougher retail
environment.

During the year, and for the first time, the Company had all of its
14 titles (22 sku's) available for release on schedule. This
further illustrates the significant improvements made by the Company in
managing its resources and the controlled timing of game production
within our refocused development process. Of these titles, Backyard
Wrestling: Don't Try This At Home; Deus Ex: Invisible War;
Championship Manager: Season 03/04 and Legacy of Kain: Defiance, each
sold between 500,000 and one million units. In addition, Hitman:
Contracts, while performing below management's expectations, has
sold 1.7 million units to date. The period also included a further one
million unit sales of Tomb Raider: The Angel of Darkness together with a
particularly robust performance from back catalogue sales which
represented 15.7% of turnover (2003: 11.0%).

The Company continued to make operational improvements throughout
the year: the European Development and Publishing divisions were
restructured and the Company's global marketing initiative was
refocused on brand management and direction. Investment in R&D
increased by 20% to GBP 39.2 million in the year and is expected to
continue to increase, reflecting the Company's commitment to invest
in developing top quality titles in future.

Intellectual Property (IP)

The Company has again made good progress in its objective of
securing owned IP supported by stringent cost and development controls.
This is reflected by the improved gross margin which rose to 62.8%
(2003: 59.0%).

In March 2004, the Company acquired IO Interactive A/S, the Danish
based studio which, together with Eidos, had been responsible for the
development of the highly successful Hitman franchise. This acquisition
secured the rights to the Hitman franchise, which has now sold over 5.5
million units to date, and significantly strengthens our European
creative base and development expertise. IO is expected to contribute to
the Group's on-going development of unique IP with plans to release
a new franchise title next year. IO's market leading technology is
also playing a key role in the Group's transition programme to next
generation Xbox 2 and PS3 platforms, which is on track.

We also believe that our decision last September, to bring the
development of the Company's best selling Championship Manager
football management game in-house, was very much the right one. The new
internal development team based in North London, at our Beautiful Game
Studio, has performed extremely well and the much improved Championship
Manager 5 will release on PC this Autumn. In Spring 2005, the game will
also release on PlayStation 2 for the first time, as well as on Xbox. In
addition, and as recently announced, Championship Manager will go online
through subscription from January 2005. We are confident that these
advances and new applications will give the successful Championship
Manager franchise a new fan base and enable the game to appeal to a
wider audience.

Our Crystal Dynamics Studio in the US is making exciting progress
in the development of the next Tomb Raider game which will be unveiled
this Autumn and is scheduled for release in the fourth quarter of the
current financial year. Following the internal transfer of the Tomb
Raider franchise from Core Design to Crystal Dynamics, Core Design has
been refocused and restructured. A number of the new concept ideas and
pre-production works, for both platform and PlayStation Portable (PSP)
application, are being developed in this studio.

During the year, the Company continued to derive revenue and
leverage value from its own intellectual property. This included a movie
deal entered into for Fear Effect (similar to those previously entered
into for Tomb Raider and Deus Ex) and a dialogue with various film
studios in relation to other products is on-going.

New Media

On 28 October 2003, Eidos announced the creation of its New Media
Division, formed to help facilitate the extension of our intellectual
property into new markets using a coordinated and strategic approach.
The division has since undertaken a number of successful projects
bringing our existing products to market through new distribution
channels, particularly online, and introducing some of our key brands to
new platforms such as mobile phone handsets, new handheld game devices
and interactive digital TV. During the year, income from these new
platforms has been generated following agreements with AT&T, Bell
Canada, China Telecom, Metaboli, Nokia, Sky and Vodafone, among many
others.

Further evidence of how the Company is successfully advancing its
owned IP into new applications is demonstrated by our new franchise
titles scheduled to release in the current financial year, namely 25 To
Life, Project: Snowblind and Just Cause, each of which are either wholly
or partly online game products.

Although the New Media Division is clearly at an early stage of
development, it continues to gain momentum and is already making a
positive contribution to the Company's financial position. We are
confident that we will build on this early success to secure the
Company's position in these new markets as the division becomes an
important part of our core business.

The Board

On 15 July 2003, the Company announced that Jeremy Heath-Smith,
Development Director of Eidos plc and Managing Director of Core Design
Limited, was stepping down from the Boards of both companies with
immediate effect. On 28 October, the Company announced that Simon
Protheroe would step down from the Eidos plc Board following his
appointment as head of the New Media Division and that Jonathan Kemp,
European Managing Director, was being promoted to the Eidos plc Board
with effect from 1 December 2003.

Our People

In what turned out to be a challenging year, our employees have
again exerted great efforts in striving to deliver upon the
Company's objectives. We would like to take this opportunity to
recognise their achievements and thank them for their continued
dedication and support.

Strategic Review

As we have previously indicated, the entertainment software market
continues to evolve and mature with franchise scale and diversity,
aligned to financial strength, becoming ever more important. In
addition, there is the continuing need to invest more heavily in R&D
ahead of the next hardware cycle. These market trends and the changing
competitive landscape have led Eidos to become increasingly reliant on
the performance of key titles. With this in mind, the Board initiated a
review of the strategic alternatives available to Eidos in order to
exploit fully the potential of the Company's extensive portfolio of
intellectual property and development capabilities. This review
commenced in June and remains in progress under the direction of the
Chairman.

Continued Development

Notwithstanding the ongoing strategic review, management remains
focused on driving the business forward and is committed to providing
the design, innovation and technological advancement that can further
improve the gameplay experience. To that end, we have a significant
release schedule planned for the current financial year which includes a
strong mix of sequel and new franchise titles.

FINANCIAL REVIEW

Turnover

Turnover decreased by 11.6% to GBP 133.9 million compared to GBP
151.5 million in the year to 30 June 2003. Overall, the Group recorded a
loss after tax of GBP 2.9 million compared to a profit of GBP 19.2
million in the year to 30 June 2003.

The Company released 22 new game sku's in the year (2003: 27),
including five for PlayStation 2 and six for Xbox with the balance being
principally PC game releases. In total, 12.5 million units were shipped
in 2004, the same as for 2003. There was a decrease in the gross average
selling price from GBP 13.73 to GBP 12.72 over the year reflecting the
continued strong performance of our back catalogue titles. Approximately 73% of the Group's total revenue was derived from console based
games, compared to 74% in the same period last year.

Operating Results

The gross margin was 62.8% compared to 59.0% in 2003. This increase
reflects the move towards internally generated intellectual property.

Operating expenses increased to GBP 89.7 million from GBP 78.8
million. This increase is in line with expectations and arises largely
from certain non-recurring savings made in 2003 together with the
increase in goodwill amortisation arising from the acquisition of IO
Interactive A/S in March 2004.

Advertising costs were GBP 20.2 million (15.1% of turnover)
compared to GBP 18.3 million (12.1% of turnover) last year. This
reflects the trend for increasing advertising support being required to
promote game releases. The fixed element of selling and marketing costs
was GBP 6.5 million compared to GBP 7.4 million in the previous year.
The reduction in expenditure is due to the full year impact of savings
made in the prior year.

Research and development, representing the Group's total
investment in product development, totalled GBP 39.2 million (2003: GBP
32.6 million). The 20% increase in this cost reflects the move towards
internally developed franchise titles and certain non-recurring savings
which occurred during the previous year. The Group expects the level of
expenditure to increase again in the current financial year.

Total administrative expenses for the year were GBP 23.8 million
including goodwill amortisation of GBP 1.6 million, compared to GBP 20.4
million including goodwill amortisation of GBP 0.2 million in 2003. The
increase in the amortisation charge resulted from the goodwill arising
on the acquisition of IO Interactive A/S on 31 March 2004. Also included
in administrative expenses for 2004 are foreign exchange losses of GBP
0.8 million against GBP 0.9 million of foreign exchange gains in 2003.
While the Group continues to invest in management and infrastructure, it
will also continue to manage its administrative expenses prudently.

After deducting operating expenses before goodwill of GBP 88.1
million, the Group made an operating loss before goodwill of GBP 2.0
million. This included the Group's share of joint venture operating
profits of GBP 2.1 million. This compares to an operating profit before
goodwill and exceptional items for the prior year of GBP 13.9 million,
which included joint venture operating profits of GBP 3.0 million.

Exceptional Items

There were no exceptional items during the year. During 2003, the
Group received a GBP 1.4 million settlement, net of costs, in respect of
its former investment in Express.com. The Group took an exceptional
charge against the full carrying value of this investment in the year to
31 March 2001 and Express.com subsequently filed for Chapter 11
bankruptcy protection.

Taxation

The Group recorded a tax charge in the year of GBP 1.0 million
which largely comprises the Group's share of taxes payable in its
profitable joint venture companies. Significant brought forward losses
remain available within the Group to offset future trading profits. The
Company has reviewed the provisions of FRS19 - Deferred Tax and believes
that no further amounts should be recognised in respect of these losses.

Earnings Per Share

The Group reported a loss after tax of GBP 2.9 million for the year
compared to a profit of GBP 19.2 million for the previous year. The
basic (loss)/earnings per share was (2.1) p compared to 13.8p for 2003,
based on the weighted average number of shares in issue during the year.
Excluding goodwill amortisation and exceptional items, the
(loss)/earnings per share was (1.0) p for 2004 (2003: 9.3p).

Liquidity and Capital Resources

Net assets at 30 June 2004 include goodwill of GBP 25.3 million
(2003: GBP 0.3 million), tangible fixed assets and investments of GBP
10.4 million (2003: GBP 7.4 million as restated, see note 7), net
current assets of GBP 40.2 million (2003: GBP 67.9 million) and other
long term creditors and provisions of GBP 3.9 million (2003: GBP 0.03
million).

At the year end, the Group had cash and cash equivalents of GBP
37.4 million (2003: GBP 58.2 million) and no debt (2003: GBP nil). The
decrease in cash was materially impacted by the acquisition of IO
Interactive A/S as referred to below. There was a cash outflow before
the management of liquid resources and financing of GBP 18.4 million
during the year (2003: GBP 0.8 million). Operating activities generated
a cash inflow of GBP 8.2 million (2003: GBP 4.7 million outflow),
reflecting the operating loss offset by a decrease in working capital
during the year.

Interest received decreased to GBP 1.9 million in the year to 30
June 2004 from GBP 3.1 million in the previous year. The decrease was
primarily due to lower average cash balances held during the year and
the lower average interest rates that existed throughout the year.

Acquisitions and Disposals

On 4 September 2003, the Group sold its 25% minority interest in
Sports Interactive for a cash consideration of GBP 488,000.

On 31 March 2004, the Group acquired IO Interactive A/S, a Danish
based studio, for an initial consideration of GBP 23.0 million, which
was satisfied as to GBP 21.0 million in cash and the residual by way of
1.5 million in new Eidos Ordinary shares. Contingent consideration of up
to GBP 5.0 million in cash is payable dependent upon the number of new
game units released by the IO studio in excess of 2.1 million units per
annum over the four year period ending 31 March 2008.

Capital Restructuring

On 5 February 2004, the High Court approved a reduction in the
Company's share premium account of GBP 60 million (following
shareholder approval at an Extraordinary General Meeting held on 12
December 2003). The reduction was registered at Companies House on 5
February 2004. The purpose behind this reduction was the directors'
belief that it was appropriate to provide the Company with additional
flexibility for possible distributions to shareholders. However, this
does not imply any commitment on the part of the Company in relation to
future distributions.

In accordance with FRS14 - Earnings per share, the diluted loss per
share for the year ended 30 June 2004 is equivalent to the basic loss
per share as any exercise of share options would have the effect of
decreasing the loss per share.

The main exchange rates which have an impact on the Group are the
United States Dollar and the Euro against the Pound Sterling. The
average United States Dollar exchange rate during the year was $1.74
(2003: $1.59) and the Euro was EUR 1.46 (2003: EUR 1.51). The rates at
30 June 2004 were $1.81 (2003: $1.65) and EUR 1.49 (2003: EUR 1.44)
respectively.

7. Basis of financial information

The financial information presented here does not constitute
statutory accounts as defined by Section 240 of the Companies Act. It
has been prepared on the basis of the accounting policies set out in the
Group's statutory accounts for the year ended 30 June 2003, except
for the change noted below in respect of own shares. The auditors have
reported on those accounts; their reports were unqualified and did not
contain statements under section 237(2) or (3) of the Companies Act
1985. The statutory accounts for the year ended 30 June 2004 will be
delivered to the Registrar of Companies following approval by
shareholders at the AGM.

Change in accounting policies:

Own shares

Own shares held by the Company's Employee Benefit Trust under
UITF 13 were previously classified as fixed asset investments. For the
shares that relate to the restricted stock scheme or the performance
share plan, as prescribed by UITF 17, the difference between their
market value at the date of grant and their exercise price is being
charged to the profit and loss account over three years, the performance
period of each scheme.

UITF 38 - Accounting for ESOP Trusts, which has been adopted, has
superseded UITF 13. The effect of adoption is to show the consideration
paid by the Company for investments in its own shares as a deduction in
arriving at shareholders' funds, instead of fixed assets. This has
resulted in fixed asset investments of GBP 199,000 being transferred to
an own shares reserve. As there is a requirement in UITF 38 to disclose
the historic cost of own shares held, a further adjustment of GBP
77,000, being the cumulative UITF 17 charge to date, has been
reclassified from the Profit and loss reserve to own shares reserve.

8. US GAAP Results

A reconciliation of our results for the year to US GAAP is included
at the end of this release for US investors. The main differences
between our UK and US GAAP reported results are in respect of the
treatment of goodwill arising on acquisitions, revenue received in
advance of services performed, vacation pay and deferred consideration
in connection with the acquisition of IO Interactive. Our UK GAAP results translated into dollars are available from the Company upon
request.

* We have revised the treatment of the amortisation of joint
venture goodwill in the Consolidated Statements of Operations reconciled to US GAAP. The June 2003 financial statements understated the US GAAP
profit by GBP 471,000. The reconciliation above has been revised to
reflect this treatment. This was also rectified in the June 2003 20-F
filing.

Shareholders' funds prepared under UK GAAP as at 30 June 2003
have been restated for the effects of UITF 38 (see note 7).

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